70.2K

Verified Solution

Link Copied!

On December 31, 2021, the end of its first year of operations, Pharoah Associates owned the following securities, that are held as a long-term investments. The securities are not held for influence or control of the investee. Common Stock Shares Cost Gehring Co. 2.100 $ 58,800 Wooderson Co. 5,100 40,800 Kitselton Co. 1,700 30,600 On December 31, 2021, the total fair value of the securities was equal to its cost. In 2022, the following transactions occurred. Aug 1 Received $0.50 per share cash dividend on Gehring Co. common stock. Sept. 1 Sold 1.530 shares of Wooderson Co.common stock for cash at $ 7 per share. Sold 840 shares of Gehring Co.common stock for cash at $ 31 per share. Oct. 1 Nov. 1 Received $ 1 per share cash dividend on Kitselton Co.common stock. Dec. 15 Received $0.50 per share cash dividend on Gehring Co. common stock. Dec. 31 Received $ 1 per share annual cash dividend on Wooderson Co.common stock At December 31, the fair values per share of the common stocks were: Gehring Co. $ 30. Wooderson Co. $ 7. and Kitselton Co. $ 16. These investments should be classified as long-term. Journalize the 2022 transactions and post to the account Stock Investments. (Use the T-account form.) (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Stock Investments v V Prepare the adjusting entry at December 31, 2022, to show the securities at fair value. (list all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account tities and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Dec 31 Show the balance sheet presentation of the investments at December 31, 2022. At this date, Pharoah Associates has common stock $ 1,466,000 and retained earnings $ 1,190,000. Pharoah Associates Balance Sheet (Partial) $ > $

Answer & Explanation Solved by verified expert

See Answer